About Pick of the Day

Every day, I will try to find what I believe is the best looking short term currency trade setup for the upcoming trading day or week. If you're a forex newbie, it can be tricky trying to figure out how to look at charts and draw lines. My goal is help you understand the psychology behind price movements in the foreign exchange markets, so you can learn to analyze your own currency charts and trade on your very own. I will post my ideas and/or reviews through out each session right here, on Twitter and on Facebook.

A Reflection on My Second Quarter Performance

From the outside, it looked like the trading gods were all against me, but after reviewing all of my trades and reflecting on my second quarter performance this weekend, it looks like my negative tendencies from Q1 were hard to shake. Here’s how it all went down…

Looking strictly at the numbers, we can see that it wasn’t good, especially when compared to my positive first quarter performance. Probably the two biggest numbers from that stat line that hit me the most is the “Average gain per winning trade (0.11%) and the “Trades not Triggered” (7).

My average win per trade decreased. And with only two winning trades, it’s easy to pinpoint my failures: I didn’t let my trade develop in my USD/CHF short (which went on to hit my profit target) and on the second, I failed to take profit at a major psychological level on my USD/JPY long, especially ahead of major economic event (BOJ interest rate & monetary policy decision). The latter actually also occurred on my EUR/USD short after the Spanish bank bailout a couple of weeks ago. EUR/USD hit 1.2500, found strong support and turned right back higher. What should have been a profit turned into a small loss….Grrrrrr

In hindsight, probably not the best decisions, but everything looks clear in hindsight, right?

The second stat that I focused on was the “Trades not Triggered” stat. Out of the seven untriggered trades, in six of them, I turned out to be correct in direction. But my need to “get in a good price” on pullbacks caused me to miss what would have been a lot positive pips. A couple of the most frustrating were the last two of the quarter (my EUR/USD range setup and Cable resistance play) as both came within a few pips of triggering before moving my way. And had they triggered, I would have still be up on the year. Looking at these trades shows that I’ve got to adjust my entry techniques and be more flexible with what price I want to get in at. After all, grabbing 100 pips with an imperfect entry vs. sticking with a perfect entry and missing 110 pips is a good trade off; life is all about smart compromises, isn’t it?

So, I’m basically a hair under being flat for the year, which doesn’t put me far behind my benchmarks: the Baclay Hedge Currency Traders Index (+1.42% YTD) and the Discretionary Traders Index (-0.51%). So I’m not discouraged, and one other thing that I’m always reminded of when I review the markets and my performance is that there is always an opportunity for positive pips around the corner. Of course, the pips aren’t just there for the taking; I’ve got to always be prepared, stay focused and be flexible. And for the third quarter, I’ll definitely focus on better trade entries and my biggest weakness: staying patient.

Alright, that’s it for now folks. Thanks for reading my blog and checking out my performance. It’s a minor bump in the road, but thanks to taking the time to review my trades, I think I’m ready to take on the rest of 2012! Cheers! Good luck and good trading!

Maybe I need to jump on this site and help everyone out. Because even in these current market conditions I am closing 62.4% win ratio.

Buster-48

I liked your optamistic and measured outlook,which I would be proud of if I can get myself to adopt your philosphy ,well done

pipcrawler

Thanks for the comments Buster! Anything can be accomplished with the right set of habits practiced everyday. including taking a few moments to reflect and improve. Practice that and over time, I think you’ll find the philosophy that will work well for you. Good luck!